Analytics and privacy - incompatible?
Jinfo Blog

By Tim Buckley Owen

Abstract

Issues over exactly what information companies hold about them are becoming increasingly important for individuals who want legislation to protect their privacy. Some might go so far as to pay a premium for protection. Regulatory proposals relating to these matters are currently being considered.

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As the American Federal Trade Commission (FTC) issues its proposals for Do Not Track regulation, and the Australians indicate that they’d like some too, the news from Europe is that people are prepared to pay a little bit more to protect their privacy. What price analytics if a critical mass of people ultimately refuse to be analysed?

To be sure, the FTC’s recommendations are still a bit permissive at this stage. It’s all about encouraging companies to adopt best practice, with hopeful comments from Commission chairman Jon Leibowitz about enabling them to “innovate and deliver creative new services that consumers can enjoy without sacrificing their privacy”.

But the stick is there alongside the carrot. The Commission also recommends that Congress considers enacting legislation covering general privacy, data security, breach notification and – notably – data brokers.

Consumers are often unaware that data brokers buy, compile and sell highly personal information about them, the Commission observes. It wants legislation that will allow consumers to get at that data, and it also wants the brokers to think about creating a website where consumers can find out about their activities.

Meanwhile in Australia, over 90% of people want legislation to force companies to tell them straight away when they’re being tracked, and to allow them to opt out immediately. The research by the University of Queensland’s Personal Information Project also discovered that almost 70% of respondents had refused to use an application because it wanted to know too much about them, and nearly 80% had refused to provide personal information at all (see also recent LiveWire comment here).

The more information companies collected, the less consumers knew about their activities, said project leader Dr Mark Andrejevic. “There’s a real imbalance in the way the digital economy works,” he suggests.

So keen are people for companies not to know about them, in fact, that they even seem willing to pay for their privacy. Launching a Study on Monetising Privacy, ENISA – the European Network & Information Security Agency – suggests that over 80% of participants in an experiment would choose to pay a “premium” to avoid disclosing more of their personal data.

Privacy pundits would argue: “Why should they have to pay?” But the business lobbying group the Confederation of British Industry argues that the current European privacy proposals would mean more costs for business which would be passed on to consumers anyway (more recent LiveWire comment).

Whatever happens, it could all be bad news for the nascent analytics industry. It’s likely to experience painful birth pangs anyway, simply trying to get its products to work properly (yet more LiveWire comment) – but could more privacy regulation actually strangle it at birth?

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